Report
Nikos Athanasoulias CFA

METLEN Energy & Metals | London calling, with €2bn EBITDA in sight; Top pick

Capital Markets Day in April to set the tone… – Following another year of sequentially improved results, with FY’24 EBITDA reaching €1.08bn (+8% yoy), 2025 looks poised to be a pivotal year for Metlen, with major announcements expected at the CMD on 28th April, ahead of its planned LSE listing in early Q3’25. During the event, mgmt will unveil the updated 2025-2028 strategy and outline the organic drivers that will lead to the ambitious €2bn EBITDA implied target by 2028 (CAGR: 17%). The above, along with the improved earnings quality in FY’24, have fueled a rally in the stock YTD, following a period of rangebound trading that overlooked the Group’s strong growth profile.

Expansion in Metals secures mid-term segmental EBITDA growth… – Metlen recently announced a €295.5mn investment in Metals, aiming to nearly double its bauxite capacity, lift its alumina output by 45% and enter gallium production through a new 50MT line. This investment is de-risked by a 2-way deal with Rio Tinto that secures the tropical bauxite supply needed for the upgraded alumina production, ensures a committed off-taker for alumina and extends the life of Metlen’s bauxite mines. We estimate the project will deliver >€80m EBITDA from 2028 onwards, implying an ROI of >60%. The Metals segment’s growth prospects are further underpinned by stronger alumina/aluminum prices, the benefits of vertical integration, and efficiencies from in-house electricity sourcing, culminating to an 8% divisional EBITDA CAGR through 2028e.

… as RES & the integrated utility remain at focus… – The deal with PPC, combined with Metlen’s expansive >14GW RES portfolio, has effectively secured asset rotation sales of >1.3GW p.a. through 2027, reinforcing EBITDA predictability. At the same time, Metlen’s operating RES portfolio of 1.4GW (371MW in Greece) is set to expand further and emerge as the primary RES growth driver, strengthening LT earnings visibility. The integrated utility remains the energy segment’s cornerstone, with generation capturing spark spreads of >€30/MWh, supported by market volatility, Metlen’s highly efficient gas units (leading the merit order), and Greece’s shift to net exporter status. Meanwhile, supply will continue acting as a natural hedge against market price fluctuations, with growth primarily volume-driven, as competitive pricing helps Metlen expand its mkt share to 30%. Finally, natural gas trading will continue fostering Group synergies, with Metlen set to maintain its leadership status based on natural gas imports, while a potential spike in TTF prices presents an upside risk to our numbers.

Lifting PT to €51.0 on outer year profit uplift; Top pick with 9% 3Y EBITDA CAGR… – We lower our 2025/26e EBITDA by 5% (but still forecast 6%/10% yoy growth), on higher electricity costs for aluminum, an aggressive pricing strategy in supply, and base effects. On the other hand, we raise our outer-year EBITDA c7% (post 2027e) on improved construction outlook and the metals expansion. As a result, we lift our PT to €51.0 (from €48), with the increase in our LT estimates and the positive effect of the Metals investment more than offsetting the modest downgrade to our 2025-26e. At our PT, Metlen would trade at 7.8x 1yr fwd EV/EBITDA, a premium to the blended peer group (
Underlying
MYTILINEOS S.A.

Mytilineos Holdings is an industrial group engaged in the sectors of Metallurgy, EPC, Energy, and Defence. Co. and its subsidiaries are engaged in three main operating business segments: Metallurgy, Constructions and Energy. Co. and its subsidiaries monitor its performance on Metallurgy and Mining Sector through the subsidiaries Aluminium S.A. (Alumina-Aluminium) and Sometra S.A. (Zinc-Lead). Co., through its subsidiary, METKA S.A., is an EPC Constructor in Greece.

Provider
Eurobank Equities
Eurobank Equities

Eurobank Equities is a Greek-based firm offering research, sales and trading services to institutional, corporate and private clients. The company is wholly owned by Eurobank, one of the 4 systemic banks in Greece.

Research is the backbone of Eurobank Equities' platform, with a team of 4 professionals committed to generating actionable investment ideas by providing timely research products. We are committed to offering value-added services to clients by filtering market noise and providing insights on the multiple sectors that we cover. Our universe includes 26 - large, medium and small cap - companies whose market capitalization amounts to 80-85% of the total market capitalization of the Athens Stock Exchange. Our research team also maintains the capacity to generate ad-hoc research for micro-cap listed companies.

Our team has consistently gained recognition among institutional investors for its quality research, having ranked No. 1 team in Greece at the Extel Surveys of 2013-2016 and 2018. We have also been named Leading Brokerage Firm in Greece over 2014-2016 and in 2018.

Analysts
Nikos Athanasoulias CFA

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